In times of crisis, it is almost common that borrowers fall behind in their mortgage payments. This occurrence is called mortgage arrears. Since mortgage arrears are a normal scenario, most lenders don’t take it too seriously as long as you can repay the outstanding arrears within a few months. However, there are some borrowers who accumulate a lot of mortgage arrears. Worse, they have no other way of repaying these arrears. In this case, lenders become anxious and will start becoming more aggressive. If you are in this situation, you may consider the following:
- Decrease the amount of your monthly mortgage. This is possible though the normal protocol, and this may be allowed depending on your situation. You can easily make up your monthly payment and pay for the arrears if you will be permitted to do this. The lender will possibly allow a decrease in your mortgage payment if your property still has a reasonable value. He may also suggest remortgage offers and cashback mortgages during the process.
- Another way to cut your monthly mortgage is by extending your payment period. This is a guaranteed way of paying your debt little by little and the lender doesn’t have to consider decreasing your total payment.
- Pay off the mortgage arrears. This is the best option you have if you are only capable of paying your arrears. You can ask a mortgage advisor for the best guidance. But people usually sell properties or find a way to raise their income in order to clear off their mortgage arrears and other debts.
- Accept a tenant in your house. Assess your situation to decide if this is possible. You can do this if you have a spare room for the tenant or you can transfer to a smaller place. By doing this, you can increase your income without giving up your house to the lender.
- Find out if you are entitled to benefits. If you lost your job or have been injured, the government offers special help. These programs usually include financial support. You can use that financial support to clear off your arrears. You can also state your condition for reconsideration by the lender.
- Renting your own house. Many people do this when they are in bad arrears. They sell their house and rent it. Doing this will allow you to stay in the comforts of your home while enjoying the cash from selling it. Though it is not guaranteed, at least you will be given enough time to pay off your debts and find a new smaller house to buy.
Remortgage offers and cashback mortgages are not your only choices. Every person has his own unique condition. That is why it is best to always seek an expert’s advice and counseling. Besides, the lender doesn’t want to take your property. As much as possible, lenders want their borrowers to stay in the house while keeping up with their monthly payments.